Universities in the Bullseye on Capitol Hill

Mike Waring
AUTM Advocacy and Alliances Coordinator



  
Right before the Memorial Day recess, the U.S. House of Representatives passed the President’s “one big beautiful” reconciliation legislation. This bill’s goal was two-fold: provide more funding for immigration reform and extend and build on the tax cuts that the President passed in his first term that were expiring.
 
In its search for revenue to help pay for these changes, the House came to universities for new revenues. The legislation that ultimately passed includes several changes to tax law that will have hugely negative impacts on our campuses:

• The bill significantly expands endowment taxes that were originally laid upon the largest private universities some years ago. These taxes will lead to higher costs to students by limiting scholarship support and less research.
• The bill also expands taxation to royalties on private universities’ intellectual property, including both copyrights and patents. These provisions will discourage innovation and economic growth.
• And the legislation also removes an exemption on taxes for non-publicly funded research income.

After days of last-minute changes and negotiations, the legislation passed 215-214 and now goes to the Senate, where that body can work its will on the process.
 
Our sister organizations – in particular the Association of American Universities (AAU) and the Association of Public and Land-grant Universities (APLU) – have already been rallying your federal relations officers and university presidents to oppose these proposed tax changes. As with the fight over the proposed 15% cap on indirect costs, now is the time for tech transfer offices to come to the aid of their leadership.
 
What are examples of great work that your office has done that will now be threatened in the future by these new taxes, if they are indeed enacted?  At a time when the United States is being challenged as never before by other nations for innovation leadership, how seriously will these reductions in revenue affect our ability to keep America the world innovation leader? Can we convince lawmakers that investments in research are just that – investments – and not merely revenues to be tapped to achieve other goals.
 
Reach out to your federal relations officers now. Offer to provide whatever data and examples you have to help them and your presidents push back against these proposals when the Senate begins its deliberations in June.   Since this legislation is a reconciliation bill, it will only need 51 votes to pass the Senate and cannot be blocked by a filibuster. We must join our colleagues across campus in helping our leaders make the case against these tax law changes that will seriously damage American competitiveness.